I guess the first thing I would say is that the middle two letters in MILC include the strong point of the cameras, regardless of brand, "interchangeable lens". If you do not think you will be using the interchangeable part, and the expense that entails, you will be forgoing a major feature of these cameras.

I would take good notice of this. If you don't want to (at least in the future) pay some more money for other lenses, then a high end P&S may suit you better. I compared my wife's Olympus XZ-1 vs my Olympus E-PM1 with kit lens and it's eye opening:

Now there are new cameras out there. The GX1 has a better sensor than my E-PM1. And my new E-M5 and the E-PM2 and E-PL5 have a better sensor than the GX1. But also the XZ-2 and other high end P&S's have better sensors now too.

Do go and try and find a place to handle the cameras. It still may be too big for your level... but only you can decide that. The Olympus and Panasonic cameras have nearly identical image quality, but they handle very different. I loved the E-PM1 while I never warmed up to the GF2. Other people are the reverse.

But if you don't want to spend about $250-$300 or more for another lens for low light (Pany 20mm or Oly 17mm or Sigma 19mm) then you may be better off with a really good P&S (which run $400+).

That said, I have 4 friends at work who all bought m4/3 cameras after I showed them one and they love them. Only 1 has additional lenses yet, but another is looking to buy a long zoom.

Thanks for your response and thanks for linking me to that comparison. Very interesting, I didn't know that P&S were capable of achieving that level of quality. So it sounds like I have two distinct options:

1. Go with a premium P&S for $400+

2. Go with a MILC and be prepared to fork out more cash for lenses. Will I be set with one additional lens for ~300 or should I expect to need multiple additional lenses?

Do you have any specific recommendations for P&S cameras to consider?

I would say you can do pretty well with just the kit lens and a $100 flash. That's what I use most of the time and it serves me well, but eventually you'll learn what you might gain from having a very wide lens, or a good telephoto, or a fast prime... that's when GAS attacks. Everyone catches the lens bug after they get started. You will too. Don't fight it.